international litigation blog

On 28 February 2017, the Paris Court of Appeal (the Court of Appeal) rendered an interesting decision endorsing the “adverse inferences” principle provided for under Article 9(5) of the IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules): “[i]f a Party fails without satisfactory explanation to produce any Document requested in a Request to Produce […] the Arbitral Tribunal may infer that such document would be adverse to the interests of that Party“.

The dispute at hand arose in the context of a share purchase agreement (the SPA) concluded between Dresser-Rand Group Inc. (the Buyer), a U.S. based company, and twelve Spanish companies (the Sellers) for the purchase of all shares in Grupo Guascor SL.READ MORE

On 23 March 2017, the Ghent Court of Appeal in Belgium (the Court of Appeal) handed down a lengthy decision on the civil merits in the very well-known Lernout & Hauspie (L&H) case. Although the judgment rendered by the Court of Appeal is very long and covers various legal issues, it contains a specific section on the recognition, in Belgium, of two American opt-out class action settlements.

As most of you know, class action suits are legal devices that allow an individual or a small group of individuals to proceed in court on behalf of a much larger and unnamed group of individuals who have suffered a similar injury and who share common claims.

While class actions form an integral part of the legal framework in the United States, European jurisdictions (with the notable exception of the Netherlands (see my previous post)) tend to be very cautious with respect to this instrument. It is only in June 2013 that the European Union published a recommendation setting out a series of common, non-binding principles that EU Member States should adopt in order to put collective redress mechanisms in place. Based on this recommendation, some EU Members that previously did not allow for collective redress mechanisms have since introduced them into their legal systems.

In sharp contrast with the American class action system – where any individual who fulfils the conditions to be part of a class action will automatically be considered as part of the class bringing the action, unless that member expressively indicates his desire to be excluded from of the proceedings (i.e. “opt-out” system) – most European systems have adhered to an “opt-in” system where plaintiff classes are formed through the expressed consent of their members.

The case at hand therefore concerns an interesting scenario in which the Belgian court, belonging to a jurisdiction where only opt-in class action are allowed, is asked to recognise a U.S. opt-out class action settlement.READ MORE

Nevertheless, a new bill (the Bill) recently put before the Dutch legislature suggests that this significant limitation could be on the way out. I therefore wanted to take this opportunity to briefly introduce you to the future changes that might be brought to the class action regime in the Netherlands.READ MORE

On 18 January 2017, the U.S. Second Circuit Court of Appeals (the Second Circuit) overturned a ruling by the Southern District of New York (SDNY) dismissing an action to enforce an ICC arbitration award rendered in Paris. The judgment (subject to a later correction issued in March) will likely be cited often as it helps clarify how the influential Second Circuit views the enforcement of awards, the applicable law regarding who an award may be enforced against, and what issues an award may preclude from later judgment.READ MORE

On 1 March 2017, the U.K. Supreme Court (the Supreme Court) found that an arbitral award debtor should not be required to pay USD 100 million in security as a pre-condition to adjourn the enforcement of the arbitral award until a decision is taken on the annulment of the award.

The Supreme Court’s decision was issued in proceedings between Nigerian National Petroleum Corporation (NNPC) and IPCO (Nigeria) Ltd (IPCO). The latter was awarded USD 152 million following arbitration proceedings seated in Nigeria. NNPC sought to set aside the award before the Nigerian courts initially on jurisdictional grounds and, from 2009 onwards, on allegations of fraud.

Meanwhile IPCO sought the enforcement of the arbitration award before the U.K. Commercial Court. This was granted on an ex parte basis, but was soon challenged by NNPC which sought to have the enforcement order set aside or adjourned, in light of NNPC’s ongoing challenge against the award in Nigeria. In response, the U.K. Commercial Court agreed to adjourn the enforcement order under section 103(5) of the U.K. Arbitration Act 1996 (the Act). This provision allows a court before which an enforcement action is pending to adjourn its decision pending the decision on the setting aside or suspension of the award at the seat of arbitration. In this case, however, the Commercial Court subjected the adjournment of the order to the payment of security worth USD 50 million, later increased to USD 80 million in 2008.READ MORE

I wanted to share with you some general personal thoughts regarding the recent decision of the Belgian Constitutional Court (the Constitutional Court) holding that third parties should be entitled to lodge third party opposition (tierce opposition) against arbitral awards.

As we discussed before, the Constitutional Court ruled that Article 1122 of the Belgian Judicial Code violated Articles 10 and 11 of the Belgian Constitution (i.e. the provisions of the Belgian Constitution on equality and non-discrimination), as this provision allowed third parties to challenge the validity of judgments rendered by a civil or a criminal court by means of third party opposition but did not offer third parties the same possibility to challenge arbitral proceedings.

According to its current reading, third party opposition under Article 1122 of the Belgian Judicial Code aims at bringing the parties back (for new proceedings) before the same judge who previously ruled on the case in the absence of the third party. Until the decision of the Constitutional Court of 16 February 2017, however, this solution applied to judicial proceedings only.

However, now that the Constitutional Court has found that this possibility should also be offered to third parties to arbitral proceedings, does this mean that new arbitral proceedings (in the presence of the third party) will have to take place before the initial arbitrators in the event that a third party files a third party opposition?READ MORE

On 15 February 2017, the Spanish Supreme Court (the Supreme Court) dismissed an appeal brought by two arbitrators against a decision of the lower courts ordering them to pay EUR 1.5 million to the German athletic product manufacturer Puma (Puma) for violating the principle of arbitral collegiality.READ MORE